10 principles of economics : First 7 are the most important
(Notes)
Principles of Microeconomics:
ch.1
Although it may sound strange, economies households are very similar
Resources must be distributed among alternative uses
Decisions: Important because
resources-scarce
Households society (economies)
ex. Who does what
chores? ex. who performs a certain job?
Scarcity : society has limited resources which, all goods services people
want, may not be produced
Economics: the study of how Society manages its scarce resources
Economics covers a wide range of topics has many approaches
within
Principle 1: people face trade-offs
ex. if you want to spend on
to get one goal you
something, you've gang to
have to give up another goal
have to give up spending
on something else
Efficiency: the property of society getting the most it can from HS Scarce resources
Equality: the property of distributing economic prosperity Uniform among the members of
society
*Efficiency is the size of the economic pie whereas equality is how evenly the pie is slice
Principle 2: The cost of something is what you give up to get it
opportunity cost ex the earnings given up to attend college
The margin, in economics, is important to consider especially for business
because
decisions1you can profoundly benefit from a decision when you consider all
the attributes at the margin
Rational decision makers take action if the actions marginal benefit
exceeds its marginal cost
CAB
Principle 3: Rational people think at the margin
airline
Accepting
This is to get a better benefit
from a
ex. A standby passenger paying
decision
lower for a seat since there
are 10 empty seats left over
after having all passangers
boarded
